The American auto industry failure is no joke. There is no consensus regarding a solution and the stakes are very high for all of us. We cannot really fathom the complete repercussions from whatever approach we take to resolve this very difficult situation involving General Motors (NYSE: GM), Ford (NYSE: F), privately held Chrysler and the UAW.There is still no resolution to the gargantuan task of re-working the U.S. automobile industry. The White House this past weekend said that while the administration is trying to work out various scenarios to rescue the ailing industry, it has not come up with a solution yet and the people involved don't expect to make any announcements for a few days.
I have been following the news about the auto industry like the rest of the nation and I have been writing about many of the issues that we face. Yesterday, I added a bit of irony Sunday Funnies: Feds could buy GM & Ford, but this is no laughing matter.
The question I ask today is this: regardless of what you think politically or financially, why are we the only country in the world, eastern or western, that has such great angst about loaning the car companies money until they can reorganize?
BMW and Daimler have asked the German government for assistance during this unprecedented downturn in the automobile market. The Chinese and Korean governments have been intimately involved with their car companies over the years. We are always accusing the Japanese of creating an uneven playing field. Toyotas and Hondas are stacking up in ports all around the world as the companies' capital is shrinking daily. Does anyone believe their governments would let those companies collapse?
How can we claim foreign governments are helping their industries gain competitive advantages and interfering in the realm of private enterprise, and yet we are balking now to help ours?
Stay tuned -- the next post in this series will be published tomorrow.
Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture and planning firm. He writes the columns Chasing Value and Serious Money. Disclosure: I do not own shares of GM or Ford.
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Reader Comments (Page 1 of 1)
12-15-2008 @ 12:30PM
Gary E. Sattler said...
As I read a large number of comments from international readers of a BBC story about our auto sector difficulties, a few interesting things stuck out to me:
There is a lot of respect for American car makers, internationally.
A lot of international readers indicated their belief that the UAW is the biggest problem.
It is widely recognized that American auto makers face unfair competition due to wage and benefit disparities between countries.
It is widely recommended that bankruptcy would force industry corrections, and that government assistance through tax dollars would delay improvements.